The Free Talk Live BBS
Free Talk Live => The Show => Topic started by: Branlin on December 11, 2010, 10:04:26 PM
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As I understand it, the US Treasury produces and sells Treasury securities (bonds) which is a way of borrowing money. Corporations and municipalities do the same thing. The buyer receives a stated interest rate every year for the stated length of the bond, then at maturity they receive their principle back.
The Fed buys these securities from the US Treasury. I believe this is what is meant by "monetizing the debt." They "print" (electronically) the money and swap it for the securities. It is like paying off a credit card with another credit card. I suppose you can do that for a while, but someday it comes crashing down.
The Fed has a legal monopoly to counterfeit money. This too, someday, will come crashing down.
If anyone here saw "Uncle Ben" Bernanke on 60 Minutes last Sunday, you probably noticed how nervous and jerky he was. Talk about a cat on a hot tin roof, LMAO. It's probably on YouTube. He must realize it's all phony, and as legendary investor Jim Rogers says, "He's been wrong about everything he's ever done, and all he knows now is to print money."